Prestige Lifting Services Pty Ltd v Wood - [2014] VSC 465

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST

S CI 2013 03074

PRESTIGE LIFTING SERVICES PTY LTD (ACN 005 697 665)	Appellant
V
ROBERT IAN WOOD T/AS ROBERT WOOD & ASSOCIATES	Respondent

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JUDGE:	GINNANE J
WHERE HELD:	Melbourne
DATE OF HEARING:	31 March 2014
DATE OF JUDGMENT:	22 September 2014
CASE MAY BE CITED AS:	Prestige Lifting Services Pty Ltd v Wood
MEDIUM NEUTRAL CITATION:	[2014] VSC 465

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Appeal – Magistrates’ Court – Solicitor’s claim for fees for acting for company – Instructions from one of two warring directors – Whether director had authority to retain the solicitor – Costs Agreement – Company’s counterclaim for repayment of fees already paid – Adequacy of Magistrates’ reasons – Appeal allowed – Legal Profession Act 2004 (Vic) ss 3.4.17, 3.4.19 and 3.4.26.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr T Wodak	Foster Nicholson Jones Lawyers
For the Respondent	Mr A N Bristow	Robert Wood & Associates

HIS HONOUR:

This appeal from the Magistrates’ Court concerns the right of a solicitor to charge legal fees to a company, when instructions to act for the company are given by only one of its two active directors and in circumstances in which the directors are in dispute about the conduct and control of the company.

On 12 June 2012, Mr Robert Wood, the respondent, who is a legal practitioner, commenced proceedings in the Magistrates’ Court against Mr Dale Williams and Prestige Lifting Services Pty Ltd (‘Prestige Lifting’) seeking to recover unpaid legal fees, totalling $27,924.92.

Mr Wood’s complaint alleged that on or about 25 November 2011, Mr Dale Williams, on his own behalf and on behalf of Prestige Lifting, instructed Mr Wood to act in relation to a dispute with other shareholders relating to the control of the company. It then pleads that on or about 9 December 2011, Mr Dale Williams, in his own right and on behalf of Prestige Lifting, signed a Costs Agreement, which Mr Wood had sent them. It then alleges that between the time of being instructed in November 2011 and 1 June 2012, Mr Wood conducted work on behalf of Mr Dale Williams and Prestige Lifting.

Prestige Lifting conducts a business of installing and servicing passenger lifts in buildings.

Mr Dale Williams was one of three directors of Prestige Lifting. The other directors were Mr Ron Van Munnen, who contended that he was its managing director and Mr Geoff Williams, who is the father of Mr Dale Williams. At relevant times, Mr Geoff Williams was not actively involved in the company’s business due to illness.

Mr Wood entered a default judgment against Prestige Lifting and Mr Dale Williams, but it was later set aside against Prestige Lifting and the claim against it proceeded to a hearing. Prestige Lifting counterclaimed for the sum of $14,500.00, which consisted of legal fees that the company had paid to Mr Wood and to counsel retained by him.

On 29 May 2013,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] VSC 465
Decision Date: 22 September 2014

CaseChat Overview and Summary

Prestige Lifting Services Pty Ltd appealed against a decision of the Magistrates’ Court, which upheld a claim by the respondent, Mr Wood, for unpaid legal fees. Mr Wood, a solicitor, had acted for the company in a dispute with one of its directors. The company disputed the validity of the retainer and argued that the director who had instructed Mr Wood did not have the authority to bind the company to the legal fees. The company also sought repayment of fees already paid to the solicitor.

The central legal issue was whether the director had the authority to retain Mr Wood and bind the company to the fees claimed. The court had to examine the authority of the director to act on behalf of the company and whether the company was bound by the fees under the circumstances. Additionally, the court needed to assess whether the Magistrates’ Court provided adequate reasons for its decision.

The Court of Appeal found that the Magistrates’ Court had not adequately addressed the issue of the director's authority to retain the solicitor and bind the company to the fees. The Appeal Court held that the director did not have the requisite authority to bind the company to the fees claimed. Consequently, the Appeal Court allowed the company's counterclaim for the repayment of fees already paid to Mr Wood. The Appeal Court concluded that the Magistrates’ Court had not sufficiently explained its reasoning, which was insufficient under the Legal Profession Act 2004 (Vic).

The Appeal Court set aside the Magistrates’ Court decision and remitted the matter for reconsideration in light of its findings. The Appeal Court also ordered that the company was entitled to recover the fees already paid to Mr Wood.

Orders